Dept. of Law & Public Safety v. Bigham

STEIN, Justice,

dissenting.

The Court upholds a regulation of the Division of Motor Vehicles (DMV), N.J.A.C. 13:19-13.1, that authorizes imposition of an automobile-insurance surcharge of $100 per year for three years on a driver who committed a $10 motor-vehicle infraction allegedly unrelated to safety concerns. I disagree.

Respondent had maintained a spotless driving record for almost nineteen years when she received a summons for driving on an expired license, contrary to N.J.S.A. 39:3-10. She pleaded guilty and paid a $10 fine, but contends that her violation *658was entirely innocent. She asserts that she did not receive a renewal application from the DMV informing her that her driver’s license was about to expire. She also claims that the DMV had sent such renewal applications in the past; that she, like virtually all other licensed drivers, relied on the renewal application to inform her of the impending expiration of her license; and that she was consequently unaware that the expiration had occurred. She argues that it is improper under those circumstances to require her to pay an insurance surcharge because the purpose of such surcharges is to make bad drivers fund the State’s system of comprehensive insurance.

The majority sustains the regulation on the basis that it furthers the statutory policies of stabilizing insurance rates and equalizing surcharges. In my view, the Court disregards the basic statutory policy that surcharges to support the Joint Underwriting Association (JUA) are to be paid only by unsafe drivers.

Both the Assigned Risk Plan, L.1968, c. 385, and the Merit Rating Plan, N.J.S.A. 17:29A-35b, which amended it, institutionalize the actuarial considerations that account for higher rates for high-risk drivers and lower rates for low-risk drivers. As the majority states, “the primary objective of the JUA was to extend automobile insurance to those drivers unable to obtain it in the voluntary market.” Ante at 650, 575 A.2d at 869 (emphasis added). The animating principle of both plans is that those drivers who are most likely to be involved in car accidents should pay higher insurance rates. Under the New Jersey Insurance Reform Act of 1982 (Reform Act), L. 1983, c. 65, surcharges are levied against those who have accidents, N.J.S.A. 17:29A-35a, those who accumulate “points” on their driver’s licenses, N.J.S.A. 17:29A-35b(l)a, and drunk drivers, N.J.S.A. 17:29A-35. Those categories of drivers clearly share the characteristic of posing a higher risk of involvement in accidents.

*659As the majority demonstrates, the Reform Act sought to correct inequities and inefficiencies that had become apparent in the operation of the comprehensive insurance system under the Assigned Risk Plan. Thus, the majority observes that the purpose of the Reform Act was “to reduce insurance inequities by replacing premium surcharges previously assessed by private insurance companies with the New Jersey Merit Rating Plan.” Ante at 650, 575 A.2d at 869. That reform of the mechanism for implementing surcharges did no more, however, than “alter[ ] the mode of meeting the statutory compulsory-insurance mandate * * *.” Ante at 650, 575 A.2d at 869 (emphasis added). It did not change the policy underlying the compulsory-insurance mandate, i.e., that liability insurance surcharges be “assess[ed] * * * for high risk drivers,” ante at 650, 575 A.2d at 869 (quoting Clark v. New Jersey Div. of Motor Vehicles, 211 N.J.Super. 708, 710, 512 A.2d 588 (App.Div.1986) (emphasis added)). Clearly, the Reform Act was intended to “make [the] automobile insurance system more equitable,” ante at 653, 575 A.2d at 871 (Statement by Hon. Thomas H. Kean, L. 1983, c. 65), but just as clearly, the surcharge system it instituted was reserved for “bad drivers.” Ibid.

The Act gives the Commissioner of Insurance authority, after consultation with the DMV Director, to impose “surcharges for motor vehicle violations and convictions for which motor vehicle points are not assessed.” N.J.S.A. 17:29A-35. That power must be exercised consistently with both the narrow amend-atory purpose of the Reform Act and with the fundamental legislative theme that restricts surcharges to bad drivers.

The regulation challenged by respondent was one of several proposed by the Commissioner in 1989 pursuant to'the Reform Act. See 16 N.J.R. 124-25. All address safety concerns. They impose surcharges for driving while suspended, for failure to maintain liability insurance on a motor vehicle or motorized bicycle, for any motor-vehicle violation resulting in a fatality, for drunk driving or refusal to submit to a chemical test in *660another jurisdiction, and also for driving on an expired license. In the statement of “Social Impact” accompanying the proposed regulation, the Commissioner stated that the surcharges would apply “for serious motor vehicle offenses.” Ibid. The recitation of the purpose of the Reform Act — “to make those who violate the traffic safety laws financially responsible for the increased costs of insurance” — emphasizes the connection between safety-related offenses and surcharges. Ibid. Thus, there is no indication in the regulation itself or in the material accompanying it that the Commissioner intended to include non-safety-related violations and convictions among the non-point violations and convictions for which surcharges are assessed.

The violation to which respondent pleaded guilty, driving without a license, may sometimes implicate safety concerns. Respondent does not argue otherwise. A person who never obtained a driver’s license, or one who intentionally failed to renew a license to avoid revealing a change in health status, could be subjected to the surcharge under this regulation. Respondent admitted her guilt of the violation; she paid the fine. She argues only that the circumstances of her violation do not indicate that she is a “bad” or a “high risk” driver, and thus to the extent that the regulation is construed to apply to her, it is invalid.

Apparently agreeing that respondent’s violation does not demonstrate that respondent is an unsafe driver, the Court speculates that the legislative purpose to impose surcharges on “bad” or “poor” drivers “could include irresponsible * * * drivers.” Ante at 656, 575 A.2d at 873 (emphasis added). In the majority’s view, a surcharge on irresponsible drivers is consistent with the Reform Act’s purposes of “stabiliz[ing insurance] rates” and remedying “extensive inequities built into the predecessor Assigned Risk Plan.” Ibid.

The majority focuses excessively on the rate-stabilizing purpose of the Reform Act and insufficiently on the underlying *661purpose of the comprehensive insurance law: to make high-risk drivers financially responsible for the higher cost of insurance. Properly construed, the Reform Act sought to stabilize surcharge rates among unsafe drivers, not among all drivers. A regulation shifting some of the financial burden to drivers whose only transgression is the innocent non-renewal of a driver’s license does not bear a close enough relationship to the central purpose of the legislation to survive judicial review.

In my view, the regulations implementing the Merit Rating Plan surcharges must afford a person convicted of driving without a license the opportunity to prove that the violation had no safety implications and was therefore irrelevant to the purposes of the Merit Rating Plan. If that showing is made, then the unlicensed-driver violation cannot be the basis of an insurance surcharge. The underlying regulation, N.J.A.C. 13:19-13.1, should be so construed. I would affirm.

For reversal and reinstatement — Chief Justice WILENTZ, and Justices HANDLER, POLLOCK, O’HERN and GARIBALDI — 5.

For affirmance — Justice STEIN — 1.